Coupang Posts Record 1Q Operating Profit... Kim Beom-seok: "We Will Create the Best Service on Earth" (Comprehensive Report 2)

Record Quarterly Sales Achieved
On Track to Achieve First 'Annual Profit'
Kim Beom-seok "Will Increase Membership Benefits"

Despite concerns over an economic downturn caused by high interest rates and inflation, Coupang recorded its highest operating profit and sales in the first quarter, continuing its growth trend. This is seen as a smooth first step toward achieving its annual profit target. Kim Beom-seok, Coupang's founder, stated, "It is encouraging that expanding various product categories has increased consumer benefits," and pledged, "We will increase membership benefits such as Coupang Eats discounts for Wow paid members going forward."

Coupang Daegu Fulfillment Center (FC) exterior view. [Photo by Coupang]

On the 10th (Korean time), Coupang announced through a performance report submitted to the U.S. Securities and Exchange Commission (SEC) that it recorded an operating profit of 136.2 billion KRW (167.7 million USD) in the first quarter of this year, marking three consecutive quarters of operating profit. Sales for the same period reached 7.399 trillion KRW (5.8053 billion USD), a 20% increase from 6.1653 trillion KRW in the same period last year, setting a new record for quarterly sales.

Sales in the core business area of product commerce (Rocket Delivery, Fresh, Marketplace) amounted to 7.2176 trillion KRW (5.65834 billion USD), a 15% increase compared to the same period last year. In Korean won terms, this represents a 21% increase. Coupang also reported that active customers increased by 5% to 19.01 million from 18.112 million in the same period last year. Correspondingly, sales per customer rose 8% to 389,050 KRW (305 USD) compared to the same period last year.

Net income for the period was 116 billion KRW (90.85 million USD). Considering that the first quarter of last year recorded an operating loss of 247.8 billion KRW and a net loss of 252.1 billion KRW, this represents a remarkable profitability improvement and a successful turnaround to profit within one year. Additionally, Coupang recorded a positive free cash flow of 575.3 billion KRW (451 million USD) for the first time on a 12-month cumulative basis in the first quarter.

Gross profit reached 1.41992 billion USD, a 36% increase compared to the same period last year. Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) profit was 240.91 million USD (307.3 billion KRW), with a margin of 4.2%. Losses in new business sectors (developing offerings) such as Coupang Play, Coupang Eats, overseas business, and fintech were 47.45 million USD, a 50% reduction compared to last year's loss of 93.74 million USD.

Coupang's first-quarter results exceeded initial market expectations. Earlier, The Wall Street Journal (WSJ) had forecasted Coupang's first-quarter sales to increase about 10% year-over-year to 7.1 trillion KRW (5.564 billion USD). It had predicted that the growth rate would fall short of last year's annual growth rate of 11.8% due to the economic downturn caused by high interest rates and inflation. However, Coupang defied these expectations and set new records for the highest quarterly operating profit and sales.

Kim Beom-seok, Chairman of Coupang's Board of Directors, poses in front of the New York Stock Exchange (NYSE) in the United States ahead of the company's listing. [Image source=Yonhap News]

Founder Kim said, "Coupang's incomparable level of investment to provide customers with a wide range of products, low prices, and excellent service is showing results." He added, "All sellers can now grow by using Coupang's fulfillment service's end-to-end network," and predicted, "The Rocket Delivery selection available to customers will be greatly expanded going forward."

Kim also emphasized, "We will continue to expand membership benefits to make the Wow membership the best service on Earth." Last month, Coupang added Coupang Eats delivery food discounts for Wow membership members. Kim stated, "The Coupang Eats discount benefits will bring more cost savings to customers."

Previously, Coupang posted profits for three consecutive quarters in the third and fourth quarters of last year but still failed to escape an annual loss. Against this backdrop, starting the first quarter of this year with a profit has sparked analysis that the company is on track to achieve its first annual profit since its founding in 2010.

This content was produced with the assistance of AI translation services.